ALEXANDRIA, Va. – In testimony before the House Financial Institutions and Consumer Credit Subcommittee today, NCUA’s Director of the Office of Examination and Insurance said the agency works hard to provide regulatory relief, and supports several bills that seek to give credit unions more flexibility.
“The NCUA Board is fully committed to continuing to provide regulatory relief,” said Larry Fazio in his testimony. “More than three-quarters of federally insured credit unions have less than $100 million in assets. These member-owned, locally driven institutions generally have fewer resources available to respond to marketplace, technological, legislative and regulatory changes. NCUA recognizes this and acts continually to fine-tune our rules to remove any unnecessary burden on credit unions whenever that does not compromise safety and soundness.”
Fazio told the committee that NCUA has deployed a number of targeted strategies for protecting the safety and soundness of members’ savings while balancing that against over-regulating.
Fazio said the agency’s efforts to ease regulation include a recently proposed rule to increase the asset ceiling for “small” credit unions to $100 million from the current $50 million, which would provide three out of four credit unions with special consideration for relief in future rulemakings. He said NCUA is also currently working on easing rules on secondary capital, member-business lending, fixed assets, asset securitization and fields of membership.
Fazio urged Congress to provide regulators with rulemaking flexibility to allow them to scale rules based on credit unions’ size and complexity, but also called on it to enable NCUA to examine third-party vendors. He suggested the latter would provide credit unions with an additional measure of regulatory relief by saving credit unions and NCUA valuable time by eliminating the need to examine and mitigate the same issue repeatedly at hundreds of credit unions.
Fazio said NCUA supports several targeted, bipartisan bills, including:
- H.R. 989, by Rep. Peter King (R-NY) and Rep. Brad Sherman (D-CA) to allow healthy, well-managed credit unions to issue supplemental capital that will count as net worth.
- H.R. 1188, by Rep. Ed Royce (D-CA) and Rep. Gregory Meeks (D-NY) to modify the cap on member-business lending.
- H.R. 1422, by Rep. Royce and Rep. Jared Huffman (D-CA) to provide parity between credit unions and banks on the treatment of one- to four-unit, non-owner-occupied residential loans by exempting such loans from the member-business lending cap.